China and Indonesia look to boost economic cooperation

China and Indonesia held the latest round of economic discussions on Aug 22 in Beijing. Officials from both countries agreed to the crucial status of the Belt and Road Initiative, and expressed a willingness for more economic cooperation.

China remains one of the most important trading partners of Indonesia. According to Badan Pusat Statistik (Statistics Indonesia), Indonesia exports $10.7 billion worth of goods to China in the first seven months of 2017, an increase of 50 percent year-over-year.

China alone has accounted for more than 12 percent of Indonesia’s total exports this year, an increase of almost 3 percent compared to the same period last year.

State Councilor Yang Jiechi stated that China sees opportunities in infrastructure, agriculture, finance and energy in Indonesia, stressing that Indonesia is an important partner of the Belt and Road Initiative.

The two countries confirmed a $4.5 billion financing of Jakarta-Bandung high speed rail construction at Belt and Road Forum in May, which added Indonesia to the first batch of countries to purchase Chinese high speed rail.

Yang believed that the new high speed rail would boost Indonesia’s economy, decreasing the travel time between Jakarta and Bandung from five hours to just 40 minutes once construction is completed.

Indonesia’s Coordinating Minister for Economic Affairs Darmin Nasution expects e-commerce and other new businesses to play an important role in strengthening China-Indonesia trade ties.

Indonesia’s online retail market makes up one third of total transactions across Southeast Asia, making it a lucrative market for Chinese companies. Data from Bank Indonesia showed the value of the country’s total online transactions reached $5.6 billion last year, increasing 78 percent from a year ago.